Nifty to move in the range of 5,000 to 5,150

The RBI’s move to boost liquidity through the 50 basis point cut in CRR helped the benchmarks close with gains of around 1.50% today. The central bank’s move helped the Nifty close above the resistance of 5,100 we had mentioned in our Monday’s closing report. The Sensex and the Nifty closed at 16,996 and 5,127, their highest since 15 November 2011. From here we may see the Nifty moving in the range of 5,000 to 5,150. The National Stock Exchange (NSE) saw its highest volume of 87.24 crore shares in the current uptrend, which began on 2 January 2012.  

The domestic market, which closed flat on Monday, opened with small gains on speculations that the Reserve Bank of India (RBI) in its quarterly monetary policy review would not revise interest rates. The Nifty started trade at 5,065, up 19 points, and the Sensex gained 55 points to 16,807 at the opening bell. Buying in banking, capital goods, consumer durables and oil & gas sectors supported early gains.

The indices fell to the day’s lows in the first hour with the Nifty at 5,050 and the Sensex at 16,770. The market was sideways in the positive terrain until the monetary policy announcement. The announcement of a 50 basis point cut in the cash reserve ratio (CRR) by the central bank pushed the indices higher. The news resulted in the BSE Bankex emerging as the top gainer and all other sectoral gauges trading in the green.

The indices continued their northbound journey as trade progressed with the benchmarks hitting their intraday highs in noon trade. At the highs, the Nifty scaled 5,141 and the Sensex crossed the 17,000 mark at 17,050.

The benchmarks gave up a small part of the gains in the last half hour, but closed with good gains even as the European markets were down 1%. The Nifty closed trade at 5,217, up 81 points and the Sensex settled 244 points higher at 16,996.

The advance-decline ratio on the NSE was positive at 1081:646.

Among the broader indices, the BSE Mid-cap index surged 1.38% and the BSE Small-cap index advanced 0.70%.

The rally enabled all sectoral indices close higher. BSE Capital Goods (up 3.30%); BSE Bankex (up 3.21%); BSE Metal (up 1.78%); BSE Auto (up 1.53%) and BSE Realty (up 1.14%) topped the list.

The top Sensex gainers were Larsen & Toubro (up 5.64%); State Bank of India (up 5.19%); Hindalco Industries (up 4.55%); Mahindra & Mahindra (up 3.56%) and ICICI Bank (up 3.30%). The top laggards on the index were Coal India (down 1.35%); Sun Pharma (down 1.29%); NTPC (down 0.94%); GAIL India (down 0.72%) and Hindustan Unilever (down 0.52%).

The best performers on the Nifty were L&T (up 5.93%); IDFC, SBI (up 5.53% each); Jaiprakash Associates (up 4.68%) and Hindalco Ind (up 4.48%). Grasim (down 2.32%); Coal India (down 1.57%); DLF (down 1.05%); Sun Pharma (down 0.95%) and HUL (down 0.77%) were at the bottom of the index.

While the Japanese and Indonesian markets were open for trade, other markets in Asia were closed for the Lunar New Year holidays. Both benchmarks closed with marginal gains on renewed concerns about Europe as the region’s finance ministers refused to pool in more public money for Greece, asking on bondholders to provide greater debt relief to help ease the way out of the crisis.

The Jakarta Composite gained 0.20% and the Nikkei 225 rose 0.22%. At the time of writing, key indices in Europe were trading with cuts of nearly 1% and US stock futures were in the negative.

Back home, institutional investors—both foreign and domestic—were net sellers of equities on Monday. While foreign institutional investors pulled out funds worth Rs58.80 crore, domestic institutional investors withdrew Rs438.48 crore from stocks.

Bangalore-based Strides Arcolab today announced the sale of its 94% shareholding in Ascent Pharmahealth, its subsidiary with operations in Australia and Southeast Asia, to NYSE-listed Watson Pharmaceuticals Inc. As part of the transaction, Watson also acquired the remaining 6% shareholding from Dennis Bastas, CEO of Ascent. Strides Arcolab soared 18.09% to close at Rs481 on the NSE.

Moser Baer’s PV business adopts MIST (Metal and Intrinsic layer Semiconductor Technology) to upgrade its PV cell efficiency to 21% to meet the current industry challenges. This will help the company achieve global competitiveness and provide long term sustainability to the business. The stock fell 0.29% to close at Rs17.45 on the NSE today.

Diversified business group ITC is understood to be gearing up to invest up to Rs1,000 crore in the FMCG segment in the next four years which will include setting up new facilities and enhancing existing capacities. The company did not confirm the figure but said it will invest in building state of the art manufacturing facilities, logistics as well as ramping up existing capacity. The stock gained 0.29% to settle at Rs205.20 on the NSE.